How to caculating Funding rate?


The futures contracts of AAX are perpetual contracts meaning they do not have an expiry date. Because of this feature, AAX futures contracts auto-roll every 8-hours with a funding rate mechanism paid between Long and Short positions to anchor the price to the spot rate in order for traders to maintain their positions.

Every 8 hours, all traders who have open positions in the perpetual swap pair, will either receiving or paying a funding fee. Whether one has to pay or receive a funding fee, depends whether they are long or short. When the Funding is positive, longs pay shorts. When it is negative, shorts pay longs.

Attention:All types of contracts are settled in BTC.

For an inverse futures contract like BTCUSD which the settlement currency is BTC:
Unrealized PnL = number of open contracts * (1/entry price - 1/market price)
Realised PnL = number of position closed * (1/entry price - 1/price at which the position is closed)

Depending on the leverage the trader choose to have, a liquidation price is determined. The higher the leverage, the liquidation price will be closer to the entry price.

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